A Common Interest Development (CID) is generally governed by mandatory associations that administer the property and are responsible for repairing, replacing, or maintaining the common area components. Common area components are referred to as “reserve components” and include items such as concrete walkways, awnings, or recreational pools. Many states require a reserve study to be performed on the CID that provides a current estimate of costs of repairing, replacing, and maintaining reserve components over a thirty year period. The results of the reserve study are recorded in a reserve study document and distributed to owners of the CID. The association sets aside a reserve account to cover the costs of repairing, replacing, and maintaining the reserve components of the CID.
The reserve study document provides invaluable information for responsibly managing the reserve account. For example, the reserve study document indicates whether there are sufficient funds in the reserve account or whether there is a deficit of funds in the reserve account. If there are sufficient funds in the reserve account, then the CID is considered to be well operated and each owner of the CID should continue to make the same monthly HOA contributions. If, on the other hand, there is a deficit of funds in the reserve account, then each owner of the CID should increase monthly HOA contributions. Unfortunately, typical owners of the CID have difficulty understanding the contents of the reserve study document. As a result, important financial aspects of the reserve study document are not effectively communicated to the owners who are contributing to the reserve account and who are financially responsible for the CID. An improved solution is desired.